“Yesterday, our Managing Director and the Chief Executive of...

“Yesterday, our Managing Director and the Chief Executive of Papyrus Egypt, met the Sohag manager of the Upper Egypt Social Development Fund, which is supporting the establishment of the factory, and submitted loan applications totaling LE6M (Egyptian Pounds) needed to complete the initial capital raising. We expect an answer to the applications shortly, and the finalization of the capital raising process before the end of February 2012.”

“We have had to be patient with the Egyptian partners in terms of timing of financial commitments because they have experienced unprecedented social and economic upheaval in the past year, yet they continue to believe in the Papyrus Egypt project and have personally committed capital to underpin the project. I am confident that we have trustworthy partners who will meet our business and financial expectations. As I said earlier, I expect significant progress by the end of February 2012.”

“In February 2012 representatives of Yellow Pallet from the Netherlands visited the Walkamin Demonstration Factory to conduct due diligence on the capacity of the Papyrus technology. The company awaits the assessment report.”

“In the previous quarter it was reported that one of the two veneering machines under construction would be completed and shipped to Egypt by the end of December 2011. Unfortunately AAMC (a wholly owned subsidiary of Papyrus Australia Ltd) did not achieve this objective. Having a machine available for the Egyptian factory is a high priority in Q3 in satisfaction of the license agreement between the Company and Papyrus Egypt.”
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